Zenith Bank Plc Shareholders Approve Plans to Transform Into a Holding Company

It has recently been reported that Zenith Bank Plc's shareholders have approved its transformation into a holding company.

Zenith Bank Plc shareholders approved it during a court-ordered Extraordinary General Meeting (EGM) held virtually at the weekend.

The shareholders of Zenith Bank Plc voted to transfer 31.396 billion ordinary shares of 50 Kobo each held in the issued and paid-up share capital of Zenith Bank Plc to Zenith Bank Holding Company Plc (the HoldCo) in exchange for the allotment of 31.396 billion ordinary shares of 50 Kobo each in the share capital of the HoldCo in the same proportion to their shareholding in the Bank. This was done by the Scheme of Arrangement dated March 28, 2024, under Section 715 of the Companies and Allied Matters Act (CAMA), 2020, between the Bank and the holders of the fully paid ordinary shares of 50 Kobo each in the Bank.

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Also, the company stated that shareholders approved the issuance of one new HoldCo GDR to each current GDR holder in exchange for their current holdings.

The shareholders of Zenith Bank Plc also approved transferring to the HoldCo all of the shares held by the Bank's nominees in Zenpay Limited, a direct subsidiary of the HoldCo, together with all rights and liabilities attached to such shares.

The CAMA Act 2020 also gave the Board of Directors the right to reregister the Bank as a private limited company and delist the Bank's shares and existing GDRs from the official lists of the Nigerian Exchange and the London Stock Exchange, respectively.

Jim Ovia, the chairman and founder of Zenith Bank, spoke and expressed his happiness at seeing the Bank become a holding company. This is expected to support the bank's digital and retail banking initiatives and put it in a favourable position to investigate new opportunities in the fintech space.

Dr. Ebenezer Onyeagwu, the group managing director and chief executive officer of Zenith Bank, also praised Ovia for his crucial contribution to establishing an organisation that has continuously led the country's financial services sector.

As the Bank moves into a holding company structure in the upcoming years, Onyeagwu expressed his optimism about the Bank's growth trajectory.

He says the HoldCo structure offers an opportunity to unlock value for shareholders in other industries besides banking.

"The first part is Fintech, where we have already received the approval and the licence from the Central Bank of Nigeria (CBN), which we are launching soon. It will focus on an area we know has not been touched on by anyone.

"So it is more like us finding an open wide space where we can begin to operate, and with a HoldCo, what that means is that we have an opportunity to diversify our investment."

He added that "we can begin to look at other business verticals that were restrained by the kind of authorisation we have. It presents a big opportunity to have a wider lens and scope regarding what we can do. It will also position us to think of opportunities beyond Africa.

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"We will be looking at key business verticals that have the potential to enable us to create value for shareholders."

According to Onyeagwu, the Bank is expected to secure the necessary approval from shareholders at the upcoming Annual General Meeting (AGM), scheduled for May 8, 2024, regarding its recapitalization plan. As instructed by the CBN, this will catalyze its capital-raising effort.

He expressed confidence in the Bank's ability to raise the required capital. He noted that Zenith was expected to raise less than its industry peers because of its strong capital base.